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Legislative Assembly for the ACT: 2004 Week 02 Hansard (Thursday, 4 March 2004) . . Page.. 862 ..

(2) Following the announcement, from the Acting Treasurer on 28 October 2002, that the balance of asset allocation would be changed to favour cash and fixed interest assets, when will the preferred long term asset allocation strategy be implemented;

(3) Given the statement in the annual report for 2002-03 from the Superannuation Unit of the importance for establishing a [strategic asset allocation] and maintaining consistent portfolio allocations, what advice did the Government receive before the decision of 28 October 2002 was taken;

(4) If the preferred long term allocation strategy has not yet been implemented, what is the reason for this delay;

(5) Has any estimation been undertaken of the cost to the SPA resulting from the change to the allocation of assets that was made in October 2002, in terms of any losses in the returns achieved for the various asset classes;

(6) If any estimation of this cost has been made, what quantum of the cost was due to the performance of each major asset class;

(7) If no estimation of this cost has been made, why not.

Mr Quinlan: The answer to the member’s question is as follows:

(1) The statement reflected my comfort with the level of expert advice being provided to Treasury in respect of strategic investment policies, and the advice periodically provided to me.

(2) Implementation of the long-term strategic asset allocation requires the appointment of appropriate fund managers across all asset classes. This is being progressed.

Once appropriate managers are in place, Treasury will advise me of the appropriate time to adopt the long term allocation.

(3) The portfolio asset allocations were allowed to naturally go overweight cash and fixed interest through a combination of directed cash inflows from Government to cash investments only, the strong returns of Australian fixed interest and the fall in value of the Government’s equity investments. During 2001-02 and 2002-03 no new monies were directed to equity investments.

(4) Refer to response to question (2).

(5) No. Any estimate would require assumptions about how the assets would otherwise have been allocated. Given that the implementation of the long term asset allocation is being progressively achieved, it is not possible to be definite about the asset allocation that would otherwise have been in place at any given time

(6) N/a.

(7) Refer to response to question (5).

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